The housing finance arm of the national insurer LIC said its loan disbursements rose 30 per cent to Rs 14,272 crore, taking the total outstanding loan portfolio to Rs 1,75,953 crore by the end of the reporting period, a growth of 16 per cent.

Chief executive and managing director Vinay Sah attributed the 30 per cent loan growth to an exceptionally high level of disbursals in the last month of the quarter (September) and said for the first half, the loan growth was only 21 per cent. He also said this level of growth is not sustainable and expects to close the year with a 17-18 per cent growth.

On the margin compression to 2.35 per cent from 2.58 per cent year-on-year, Sah told PTI that Q3 and Q4 margins should be better as the impact of increasing the prime lending rates four times or a cumulative 60 bps so far this year will be reflected going forward.

While it had increased the lending rates twice in Q1, it had increased the same once in Q2 and the fourth hike is effective October 1. "This should help us clock better margins in the second half," said Sah.

Asked whether the company has any liquidity issue, he answered in the negative and described the same as "comfortable" and said the company has no exposure to the crippled IL&FS group.

On the margin compression and the prevailing high cost of funds, he said LICHFL has in fact seen its cost of funds coming down a bit on an average but incrementally it has gone by a bit.

The company meets over 70 per cent of its growth capital from non-convertible debentures (NCDs), while bank funding is only around 18 per cent. The rest is met through commercial papers.

Since the beginning of this fiscal, it has raised Rs 3,000 crore from NCDs.

The individual loan portfolio, which comprises 94 per cent of the total portfolio, grew 13.5 per cent to Rs 1,65,102 crore, from Rs 1,45,486 crore, Sah said. Commenting on the performance, he said, "We've seen strong disbursal growth and expect the trend to continue in the future. We saw a strong growth in affordable segment loans and is poised to continue this growth trajectory."

He also said the company has no liquidity crisis, and termed the same as